Pfizer, Inc. Animal Health
Products
Janet Glidden
Karyn Woolley
2-28-06
The Case
Less Demand for U.S. beef and
the resulting sales decline of
Pfizer products
Per Capita Meat Consumption
Cow
60%
40%
Poultry
20%
Pig
0%
1970 1980
1992
Year
1997 2003
Other
(Veal/Lamb)
Who Is Pfizer
• Founded1849; Headquartered in New York, NY
• 70 Manufacturing facilities; 9 R & D sites in 5 countries
• Listed on the New York Stock Exchange
• Employs 115,000 employees in 180 countries
• Primary Lines of Business:
*Pharmaceutical Human Health (Lipitor, Viagra, Celebrex)
*Consumer Health (Listerine, Visine, Rolaids, Sudafed)
*Animal Health (Revolution)
Pfizer
• Mission Statement: "We will become the
world’s most valued company to patients,
customers, colleagues, investors, business
partners, and the communities where we work
and live."
• Purpose: "We dedicate ourselves to
humanity’s quest for longer, healthier, happier
lives, through innovation in pharmaceutical,
consumer and animal health products."
Pfizer Animal Health
Pfizer Animal Health has two divisions:
Companion Animals (pets)
*cats, dogs, & horses
Livestock
• beef cattle, dairy cattle, & pork
The Environment
•
Economic Conditions & Trends
*NAFTA Allows imports from Canada & Mexico
*Mad Cow Scare prevents Imports to Asia
•
Cultural and Social Trends
*Public Concerns over Medicine Safety (celebrex, vioxx recalls)
*Working families want fast, microwavable meals
*Nutrition a growing concern (low fat/low cholesterol)
*Corporate Responsibility Wanted
Perceptions: high profits & Executive pay = soaring prices
Asian tsunami & Pakistan earthquake relief – $1+ million donated
Hurricane Katrina & Rita – $2+ million donated
•
Political and Legal Issues
*Lawsuits: US & British courts uphold Lipitor patents until 2011
*FDA regulations tighten due to recalls
*Access to prescriptions for the needy
The Industry
• Increasing Demand
» Demands for animal health products are estimated to reach
7.8 billion in 2006
• Gains will be driven by:
» Continuing threats of animal disease
» Ongoing food safety concerns
» Growth in pet populations
• The Pharmaceutical industry as a whole has been
underperforming the past 5 years due to:
»
»
»
»
Expiring patents
Less than robust pipeline prospects
Consumers’ concern over drug safety
Managed care controls on spending
A Glance at the Competition
PFIZER'S COMPETITORS
Competitor
Number of Employees
2005 Net Revenues
Pfizer
115,000
52 million
Bayer
114,000
40 million
Novartis
81,000
28 million
Merck (Merial)
63,000
23 million
Weyth
51,000
19 million
Marketing Stats
• $3 Billion Ad Budget:
4th largest in the U.S.
• 38,000 Sales Reps:
equivalent to three U.S. Army divisions
• 8,500 Lipitor Rx’s dispensed per hour:
In the U.S. in 2004
$74.8 million in revenue
Marketing Strategy
•
Market direct to consumers through
*Prime time t.v. & magazine ads
•
Marketing Armies
*Physicians have been inundated – some seeing 3 Pfizer reps a day
•
Mass marketing approach
*Worked well with drugs targeting large population’s unmet needs
*Will not be effective for targeted genetic drugs of the future
•
Pfizer Educational Programs
*Ask Pfizer On-line
*Cartoon Pill Phil
•
Pfizer sells animal products only to
*Vets & “feed and seed” stores
*Farmers & ranchers perceive vets as their most trusted contacts
Pfizer SWOT Analysis
-Strengths• Currently the largest pharmaceutical company in the industry
• Cash Rich with a strong balance sheet to borrow against; Adequate
revenues to pursue aggressive advertising/marketing programs
• Actively seeking Licensing and Acquisition opportunities
• Implementing cost cuts to add 4 Billion in savings by 2008
• Educational programs for Consumers
• Pipeline prospects expected to generate 8 billion in sales by 2010
(Potential Blockbuster Torcetrapib/Lipitor)
• Pfizer has consistently superior products that competitive products
typically can’t match
• Pfizer’s reputation is highly respected among vets and ranchers
Pfizer SWOT Analysis
Weaknesses
• Reduction of R & D spending by 13% 2005 to 7.4 billion
• Compensation packages for top executives are under
scrutiny
• Poor public relations regarding maintenance of high
prices bringing drugs beyond the reach of the potential
users
• Pfizer uses animals to test it’s products
• Shortage of new blockbuster drugs in the pipeline
• Mass marketing strategy will not be effective for future
oncology medications unique to individual genetics
Pfizer SWOT Analysis
Opportunities
• China; aging population, increasing obesity and
heart disease offer new growing market
• Potential sale of Consumer Health Division;
Listerine, Benedryl
• Licensing/acquisition opportunities
• $100 million dollar study on Celebrex
• Torcetrapib (lowers LDL, raises HDL)
• Successful Lipitor patent litigation
Pfizer SWOT Analysis
Threats
•
•
•
•
•
•
•
•
Intense competition from generics
Fewer pipeline prospects
Consumer safety concerns (Vioxx, Celebrex)
Patent expirations; drugs that generated 11 billion sales in the past
will lose patent protection in 2006 including Zoloft
Tightening legislation as FDA becomes increasingly discriminating in
the face of Vioxx recall
Litigations expenses necessary to defend intellectual property
Competition from other pharmaceutical companies looking for
licensing/acquisition opportunities
$100 million study on Celebrex to determine safety/threats
• Failure of target industry, such as the beef industry in the US.
The Problem
• Less Demand for U.S. beef and the
resulting sales decline of Pfizer products
• Consumers Want:
– Food Safety (concerns: mad cow disease)
– Healthy Alternatives (chicken, fish)
– Ease of preparation (microwaveable products)
• Barriers to potential new markets
– Trade barriers due to mad cow
Options
• Reduce expenditures on declining beef
market & recognize & invest in new markets
such as poultry & pets
• Focus on Co. reputation & work to increase
public’s perception of Pfizer & the
pharmaceutical industry
• Remain committed to working with U.S. beef
growers to help return producers to
profitability
Recommendation:
Partner with U.S. beef growers to help return producers to profitability
Stand firm & remain committed to working with beef producers
• Demand for beef aboard is growing, eventually importing will open to U.S. & demand will be
substantial
• Demand for animal pharmaceuticals will follow
Invest in growing animal health product markets abroad
• Target those presently supplying beef to Asia (Latin America)
• Establish market share now making it difficult for competitors to get a foothold in the future
Assist beef growers to boost perceptions regarding beef’s nutritional benefits
• Pfizer has extensive skill and experience in marketing and advertisement
• Pfizer has a more than sufficient advertising budget
Pfizer’s products are recognized as consistently high quality
• Build on the Trust that ranchers have in Vets
Invest in genetic & parentage R & D to assist ranchers document age/heritage
• Pfizer has extensive capital to invest further in R & D